Keeping your debt under control is the only option you have if you want to avoid filing bankruptcy. Filing bankruptcy is often associated with a social stigma. Moreover, it also involves the huge effort you need to put in to get back on feet later, even with all your debt written off. Hence it is always better to avoid this situation.
There are many ways to check your financial status. Taking preventive measures is always better than trying to cope with a difficult situation
1. Keep a track of all your debts at all times. You should be aware of how much you are spending and the amount of debt accumulated. This would also help you analyze the financial status you are in, at any point of time.
2. Restrict your spending for some time. Since you already have a lot of debts accumulated, there is no point in adding more to it. And if you feel you do not have the will power to keep yourself under control, cancel your credit card.
3. Do not borrow any more money. Once in debt, always in debt it is said. It becomes a vicious cycle and is difficult to break. If you intend to find
ways to pay off debts fast, you should be able to break this cycle.
4. Transfer your funds into another credit card. There are several companies who offer credit at a lower interest than what you already have. It is better to keep the interest rates as low as possible as interest amount is much larger than the principal amount.
5. Pay off one huge debt. It is wise to make the
credit card repaymentof the card that holds the maximum of your debt. Once it is paid off, your can set a pattern to aid you with the rest of your debt. Once you have paid off the huge part of your debt, the balance amount can be divided into smaller amounts to be paid off monthly. The only thing to ensure here is that you are making the monthly payments without fail.
6. Create an emergency fund. This is an age-old technique used mainly to reserve money for handling medical costs or other such emergencies. But this can also be used as a technique to help you manage your debt. If you start securing money in the emergency fund when your income is higher than your debt, you would have a good amount accumulated in this. This money could be used as a resort to pay off the debts.
The last but very difficult option is to file a bankruptcy. This would clear you off all your debts. But the procedure of getting off your debts after filing bankruptcy also would take several months time, as you would have to go through Government counseling where all your options are analyzed.
You do not need a lawyer to file a personal bankruptcy, it is possible on an individual level. The details how to file chapter 7 bankruptcyis available on the internet and can be read by all.
